What's the world's biggest PC maker going to do for its next trick? Re-invent the music industry? Done that. Change the smartphone business -- mission ongoing. Transform personal computing (it invented personal computing). No. None of those things. Coming up next from Apple [AAPL] comes the mythical, the legendary, the often seen but never, ever sighted, chimera-like unicorn that may, or may not, be the Apple TV. And it looks like that this slice of 'Designed in Cupertino' disruption's going to ship this year.
Switching the channels
"OK, OK," I hear you say. "We've heard this before, right? Apple will reveal its new television viewing experience later this year, perhaps infesting the beautifully-designed box with the ability to run apps, a built-in camera, motion and Siri/voice control and complete integration with iTunes."
That's right, dear reader, but now we have new news which shows the GREAT PROJECT is well underway. Indeed, the company has begun to line-up component suppliers for the new device (most likely available first in the U.S. of A.).
Naturally the latest claims come from Gene Munster, who has been anticipating an Apple television for slightly longer than I have. "Apple enters markets to reinvent them," wrote the Piper Jaffray analyst this week.
Playing with parts
Munster claims a conversation with a major TV component supplier who claims to have been contacted by Apple to discuss components for TV displays. Add news that the company has been investing heavily in display manufacturers (hello, Sharp) and you have the scene rapidly being set for the introduction of this fairy-tale beast.
Munster anticipates a late 2012 launch, which could make sense, though I'd observe the challenge there may be the likely dilution of iPhone sales, with the next-generation of that device due about the same time. I'd imagine a product introduction in the mid-year makes more sense, because that launch would also not interfere with any new iPads, and would chime nicely with Apple's annual developer event, WWDC 2012.
After all, this new product's a potential gold mine for developers to create whole new forms of front room entertainment. Like a Wii mixed with an iPad, and all liberally dosed with the content ecosystem excellence which is iTunes (though don't talk about the nested radio streaming, lack of innovation in those Visualizers or the file system which seems to annoy so many folks).
The Eddy Cue challenge
iTunes is the sticking point here. Don't forget Neil Young's confirmation that Apple did make an attempt to offer high-res (near CD) quality music via iTunes.
In that case, I imagine the nasty record labels refused to play ball, preferring instead to put their weight behind Spotify, a business they own and which is based entirely on paying musicians peanuts for streamed tracks, while seeing the labels take the largest slice of any streaming royalties while also taking a slice of Spotify's profits. Spotify effectively has become the label's new music retail arm.
This time round Apple's iTunes chief, Eddy Cue, has his work cut out convincing broadcast content creators worldwide to extend their relationship with iTunes in offering their shows in various ways (subscription, a la carte, purchase) for use on the Apple television.
The conversations on this will be for serious money, as those content providers are concerned at loss of ads income (lack of ads will be part of what makes Apple's offering so cool, hopefully) and at potential loss of cable company subsidies.
The TV will of course work with conventional forms of broadcast, but perhaps not as well. I can imagine, for example, that you'll get more remote control (voice) functions when accessing an iTunes broadcast than you might when using a conventional channel. After all, the devil's in the code wrapped around each show's tail.
It don't mean a thing without the zing
These complexities could still put Apple's execution under restraint. The company won't bring this product to market unless it can wrap the concept in tight rubber in order to ensure it's an effective solution.
Or, as Munster puts it: "We believe that Apple only enters mature markets with the goal of revolutionizing them, as it did with the smartphone. Without a revamped TV content solution, we do not think Apple enters the TV market."
Munster mutters a trio of bring-to-market approaches for the device. These include a better interface for managing existing transmissions, live entertainment from iTunes/the Web and monthly content subscriptions. I don't see Apple doing one or the other of these, but a magical medley of all three. Because it can and doing so makes more sense.
Most recently the analysts at IHS pointed out: "Apple has the opportunity to do for television what has done for PCs and tablets - offering something that's easy to use, works right out of the box and that delivers a compelling user interface that's unparalleled in the industry.
"But even more important than that, Apple is really the only company that can pull off partnerships with operators, allowing it to offer a television set that's completely ready to watch when a consumer buys it, requiring no additional hardware like a set-top box, or a subscription for service from a third party."
The Wall Street Journal recently set the cat among speculation pigeons when it published an intensive look into everything known about Apple's upcoming television set.
I've written extensively on Apple's plans for TV in these stories noted below, but for now lets part ways with some words from Apple founder, Steve Jobs, speaking to his biographer:
"I'd like to create an integrated television set that is completely easy to use. It would be seamlessly synched with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it."
Smart TV is ready for the Apple television moment
About this Apple TV revolution chatter
Apple's Steve Jobs will beat Sony from the afterlife
Apple 2012 rumor: iTV Q2, iPad 3 Q1, iPhone 5 Q4
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